Harley bides its time on electric motorcycles

JamesR. Hagerty

MILWAUKEE-- Harley-Davidson Inc.'s LiveWire battery-powered motorcycle, announced a year ago and demonstrated across the U.S. and in Europe, is unlikely to hit the market for at least two or three years, new Chief Executive Matt Levatich said in an interview.

The aluminum-bodied prototypes emit a low-pitched whine, quieter than a typical lawn mower, rather than the traditional Harley rumble. They are a big part of the company's effort to engage young adults and reduce reliance on aging baby boomers. The LiveWire has generated mostly positive reviews for its unflashy black-and-gray look and rapid, clutch-free acceleration. "I love the way it looks," said a competitor, Scot Harden, marketing chief of Zero Motorcyles Inc.

Zero has been selling electric motorcycles for several years. A bigger rival, Polaris Industries Inc., plans to launch one later this year.

Harley is betting its dominant U.S. market share in traditional motorcycles and the company's marketing clout mean it can afford to give others a head start.

Mr. Levatich said Harley would await improvements in battery technology so the LiveWire can have the performance he believes buyers expect. "Will we get to that Nirvana that customers say they want? Probably not, " he said. "Will we get close enough? I believe we will."

The likely launch, he said, is "not in the next couple years but it's not past 2020 either, unless we run into some impossible barrier." Harley hasn't previously given a time frame for the LiveWire's launch.

The three dozen LiveWire prototypes produced by Harley, and tested by 6,800 people at dealer events around the U.S., have a range of roughly 50 miles between battery recharges, depending on driving speed and conditions. Mr. Levatich said potential buyers have indicated they want a range of at least 100 miles. That requirement might come down, he said, if employers start to provide charging stations.

Cost is another problem. Gasoline-powered Harleys sell in a range from roughly $7,000 for the smallest models to $40,000 for the company's fanciest bikes. Mr. Levatich said riders generally have indicated they would pay $20,000 for the LiveWire, but the company couldn't profitably sell the bike at anywhere near that level, given today's battery technology. Polaris, maker of Victory and Indian motorcycles, has said it expects to price its electric model in the $21,000-to-$25,000 range.

Harley and others say they believe electric motorcycles will appeal to young, urban adults concerned about pollution from gasoline-powered versions and eager for a lightweight machine that can thread through traffic. "We don't see this as a motorcycle people are going to ride to Sturgis," site of an annual summer motorcycle rally in South Dakota, said Mr. Levatich. "We see it as an urban product."

Baby boomers and older Gen-Xers (such as Mr. Levatich, who is 50 years old) remain the core buyers of Harley motorcycles, but the CEO said the company needs to continue focusing on its outreach to younger riders, women and minorities. Harley shares have slumped recently amid a decline in market share that the company blames on discounting by rivals.

Global sales of electric motorcycles are likely to reach 1.5 million units in 2024, from a projected 1.2 million this year, according to Navigant Research. Sales of smaller electric scooters will rise to 4.4 million from 4.1 million in the same period, Navigant forecasts. Sales of all types of motorcycles currently total about 100 million a year, Freedonia Group has estimated.

Electric motorcycles now are mostly made by niche competitors such as Zero, based in Scotts Valley, Calif. But they will soon be joined by Polaris and perhaps some sizable Japanese rivals. Yamaha Motor Co. has expressed interest in the market. BMW AG of Germany already sells electric scooters.

Zero's Mr. Harden said models from big-name companies will give more credibility to electric motorcycles and spread awareness. He said Zero attracted more Web traffic than ever the day Harley announced the LiveWire in June 2014. Zero recently cut prices on its motorcycles by more than $1,000, citing lower battery costs. They now range from about $8,500 to $16,000.

Polaris bought a small electric-motorcycle maker, Brammo Inc., in January to gain more technology in the field. Steven Menneto, vice president, motorcycles, at Polaris, said electric motorcycles won't replace those with internal-combustion engines but will grow in importance. "We clearly need to be in that space," he said.

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